How I Trade

To be a private trader is to be free.

Buy and hold investors, who watched their 401(k)s evaporate over the past year, are victims of a great fear that they might miss the upturn, and therefore they ride their positions down to the depths. They lack the will to act.

Institutional traders may want be nimble and quick (like Jack with his candlestick chart), but they can't. Their positions are so huge that it's like trying to do a tight U-turn with an oil tanker. It can't be done.

Private traders, by contrast, have the will to act, and are driving little Honda Civics, so they can turn fast to meet changes in the marketplace.

Some private traders are called to be day-traders, but not me. I hate sitting at a computer seven hours a day watching the tick-charts. I have better things to do -- read the New York Times, write poetry for my website at www.daypoems.net, read books, hike in the Tualitin Mountains or along the Willamette River.

I use the daily charts to trade, and my positions generally will last a few days, maybe even a few weeks. Perhaps I'm giving up gains with such a slothful routine, but what good is the freedom of a private trader if it can't be savored?

I like to use unambiguous technical signals for my trades, and in a later posting, I'l talk about how I construct my signalling systems.